It has been suggested that the average MSP would attend the opening of an envelope. But the presence of Scotland’s deputy first minister, Jim Wallace, at the launch of aviation giant Goodrich’s Prestwick facility demonstrated the importance of the sector to Ayrshire’s ailing industrial market.
The US-owned firm took a custom-built 120,000 sq ft maintenance and repair facility in the first letting at Scottish Enterprise Ayrshire’s dedicated aviation park, Prestwick International Aerospace Park. The 84-acre greenfield site, adjacent to Prestwick International Airport, is capable of accommodating more than 750,000 sq ft of new build.
Although SEA remains tight-lipped about the deal, it is understood the freehold was sold at a significant premium. One local agent says Goodrich probably paid around £100,000 an acre, compared with the going rate for prime industrial land of £75,000.
With a legacy of oversupply and low demand in the Ayrshire counties – Irvine in north Ayrshire has an industrial vacancy rate of 25% – many believe developing a vigorous aerospace cluster could be the saviour of the region’s industrial sector.
Manager of Global Connections at SAE, Michael Wright, says the aerospace sector is viewed as a primary driver of the Scottish economy. But he adds that it is particularly important to Ayrshire because of its connections to the sector and the availability of a skilled workforce.
“Ayrshire figures highly in the executive’s aerospace strategy, and we want to target companies that manufacture and overhaul aircraft. It is about developing the supply chain to get Scottish businesses to service this sector.” But, pertinently, he adds: “Over time, the growth of this sub-sector will affect rents in Ayrshire.”
The aerospace sector is already strong in this region. Not only has Goodrich expanded into its facility but BAe Systems, GE Caledonian, and Woodward Governor also build and maintain aircraft systems in south Ayrshire. There is a strong skills base in the area to service these types of business, which is part of the reason why Goodrich decided to expand in the first place. As a result, Scottish Enterprise wants to develop some speculative units of 20,000 sq ft at the Aerospace Park for supply chain companies. The agency hopes to be on site by the end of the year.
Nevertheless, a question mark remains over whether the strategy will benefit the wider industrial market. The electronics downturn brought around 500,000 sq ft of industrial space back to the market. In addition, in a climate of weak demand, Ayrshire is regarded as peripheral to occupiers that see plentiful and cheap supply in the central belt between Edinburgh and Glasgow.
“I just don’t see what magic can be brought to the industrial market to drive rents forward,” states Pat Cairney, director of Ayr property consultant Bell Ingram. Nevertheless, he is not against trying to get the ball rolling. “We have to build on what we have locally,” he says. “We have the skills and a perception of a high-quality aerospace market in Ayrshire. Clearly, we have to build on that speciality because Ayrshire will struggle to compete with other areas in the region for general industrial business.”
Cairney believes any benefits of enlarging the aerospace sector will be felt mainly around Prestwick airport, but believes that Irvine could benefit as well.
The aerospace community is beginning to acknowledge Ayrshire’s significance. “People do sit up and take notice when a company like Goodrich expands in an area,” says Wright.
Prestwick Airport bucked the trend and grew through 9/11 and the SARS epidemic. Although the aerospace sectors in Ireland and Wales also performed well, Scottish Enterprise believes having a dedicated aerospace park will ultimately reap rewards for the wider region.
In addition to its developments at Prestwick International Aerospace Park, Scottish Enterprise has also launched the Scottish Aerospace Strategy, which is designed to assist aerospace firms in the area “to move up the value chain”. It believes that providing such support structures will encourage occupiers to expand in the region rather than move elsewhere, and create the critical mass of a bona fide cluster.
But there is no point in pretending that Scottish Enterprise is going to be crushed in the stampede to take space at its park. The global aviation sector is still treading tentatively, despite the green shoots of recovery being evident for some time. In addition, Prestwick airport is no longer the tour de force in Scottish aviation that it once was. It competes, most notably, with Glasgow International Airport and a host of other regional airports, north and south of the border.
But, nevertheless, there are several factors at work that can aid the aerospace sector’s growth in Ayrshire and, in turn, help to revive the flagging industrial market.
“The whole region will be vastly improved once the M77 extension [to Fenwick in East Ayrshire] is completed,” says Alan Kinloch, regional development manager with Henry Boot Developments. He continues: “When it becomes more widely realised how close Prestwick is to Kingston Bridge in Glasgow, that will benefit Ayrshire. There has been substantial growth in demand for residential in the area, and that is the base for all economic growth.”
And, although Ayrshire has traditionally been a cheaper alternative to the central belt, industrial freeholds are extremely competitive. Cairney says that developers should take advantage of rock-bottom prices to realise massive gains when the market turns around.Ayrshire has a vibrant industrial past. But in order to ensure that its legacy is not one of terminal decline, the gamble of diverting resources to the aerospace sector must pay off.
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Scotland’s premier horse-racing course is set to receive a £30m makeover in a bid to turn the venue of the Scottish Grand National into a major leisure destination. Dawn Developments has submitted a proposal for a hotel, bar, restaurants, cinema, shops and homes at Ayr racetrack. The developer submitted the proposal last month on behalf of the Western Meeting Club, which took over the course last year. Russell Stewart, a director at Dawn, says: “Ayr is Scotland’s premier racecourse, but for a long time no investment has been made. The redevelopment should benefit South Ayrshire from both an economic and tourism viewpoint. A successful racecourse provides spin-offs to the community from taxi drivers to hoteliers to shop-keepers.” Montagu Evans’ partner Gavin Anderson, which is agent for the scheme, believes the proposal will meet little resistance from South Ayrshire council. |
